Millions of older people received a bumper State Pension boost on April 10 when weekly payments rise by 10.1 per cent as part of the annual benefits uprating. The latest figures from the Department for Work and Pensions (DWP) show there are now 12.6million people across Great Britain receiving State Pension payments, including 1.1million living abroad and 992,052 in Scotland.
Of that overall total, there are 9.7million older people set to receive Basic State Pension payments of up to £156.20 each week, compared to 2.9million getting the New State Pension, which is now worth up to £203.85 each week. However, pensions expert Helen Morrissey warns that not everyone over 66 will receive the maximum amount, especially women.
The head of retirement analysis at Hargreaves Lansdown explained: “Women in particular can have gaps in their National Insurance record that mean they aren’t currently entitled to a full pension.”
The current age of retirement is 66 for men and women across Great Britain and is set to rise to 67 between 2026 and 2028. The UK Government recently announced that it will review the rise to 68 two years after the next general election, which is due to take place next year.
But there are several things everyone can check now to ensure they maximise State Pension payments - even if they have reached retirement age. Ms Morrissey explained: “There are things you can do to plug the gaps, including checking to see if you were entitled to claim a benefit (such as child benefit) which comes with a National Insurance credit during that time, and seeing if you can backdate a claim.
“You can also buy voluntary National Insurance credits, which can work out very good value. Generally, you can purchase credits to plug gaps going back six tax years but if you’re a man born after 5 April 1951, or a woman born after 5 April 1953 you can currently plug gaps in your National Insurance record going back to 2006.”
The deadline to purchase over this longer period was recently extended until the end of July, after unprecedented interest meant phone lines to the Future Pension Centre were jammed.
But, before you rush to plug gaps in your National Insurance (NI) record, the pensions expert warns: “It is hugely important that you speak to DWP before parting with any money for voluntary National Insurance credits as they can confirm if you will definitely benefit from buying them. In some instances, such as if you were contracted out for instance, you may not benefit from the extra credits.”
State Pension payment rates 2023/24
To get the full New State Pension you need 35 years’ worth of NI contributions and to receive any payment from it at all, you need at least 10 years. Payments increased on April 10, however, the first payment after this date will contain a mix of old and new pay rates.
Full New State Pension
You are eligible for the New State Pension if you are:
- a man born on or after April 6, 1951
- a woman born on or after April 6, 1953
New State Pension payment rates
- Weekly rate: £203.85, an increase of £18.70 from £185.15
- Four-weekly rate: £815.40, an increase of £74.80 from £740.60
Basic State Pension (Category A or B)
You are eligible for the Basic State Pension if you are:
- a man born before April 6, 1951
- a woman born before April 6, 1953
Basic State Pension payment rates
- Weekly rate: £156.20, an increase of £14.35 from £141.85
- Four-weekly rate: £624.80, an increase of £57.40 from £567.40
How to boost your State Pension
Check your State Pension forecast
Go online and check your State Pension entitlement on the ‘Check your State Pension forecast’ page on the GOV.UK website here.
This will also tell you your State Pension age - when you can officially retire and start collecting payments.
Claim Child Benefit
Women in particular miss out on valuable State Pension credits when they are at home looking after children. However, if they claim Child Benefit, they will receive National Insurance credits that count towards their State Pension. Many women have missed out on this in the past because their husband claimed the Child Benefit rather than themselves.
Others missed out when they opted out of Child Benefit after the introduction of the High-Income Child Benefit Tax Charge. If you claim Child Benefit in your name, then you will get the National Insurance credit towards your State Pension.
Specified Adult Childcare Credit
Are you under State Pension age and looking after a family member under the age of 12 while their parent or main carer goes back to work?
If this is the case, you could qualify for National Insurance credits under Specified Adult Childcare Credit as the working parent essentially transfers their NI credit to you.
There are other situations where you are receiving benefits and you can still claim National Insurance credits. For example, if you are off work sick on Statutory Sick Pay. It is always worth checking to see if you may be entitled.
Buy National Insurance credits
If you can spare the cash, you can plug gaps in your NI record by buying voluntary class 3 NI contributions. Buying a full extra year costs around £800, though partial years will be cheaper. For each year bought you get 1/35th of a year’s state pension - around £275. This means you effectively earn your money back in around three years, so it can prove very good value.
It is, however, really important to check that it is worth your while paying for these credits so always check with DWP before doing so.
Find out more about plugging gaps in your National Insurance record on GOV.UK here.
Can you claim Pension Credit?
Pension Credit aims to top up the incomes of the poorest pensioners and acts as a valuable gateway to other benefits such as help with heating costs, Council Tax and a free TV licence for the over-75s.
Pension Credit claimants are also entitled to a £900 cost of living payment due to be paid in three segments over the coming months. The qualifying period for the first payment of £301 was January 26 - February 25, 2023. However, as claims can be backdated for three months you could receive this if you make a successful claim before May 19, 2023 - find out more here.
To keep up to date with the latest State Pension news, join our Money Saving Scotland Facebook page here, follow us on Twitter @Record_Money, or subscribe to our newsletter which goes out Monday to Friday - sign up here.
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